FNArena’s Weekly Insights – February 17 2020
What a difference six months makes in the share market. It’s still early days for the local corporate results season in Australia, but a number of positive trends are vindicating the strong buying that supported equities in January:
-companies are finding it easier to meet or beat market expectations;
-earnings estimates last week made a trend change and are now rising instead of falling.
Of course, the cynics among us can counter-argue that market expectations leading into the February reporting season were rather low. This is true, but the same observation applied to the August reporting last year, and that turned out the worst reporting season post-GFC for corporate Australia.
Bottom line: things are improving, without getting too carried away, also helped by the fact investors are willing to take a supportive view, as long as the financial performance doesn’t fall too much behind on what should reasonably be expected.
